Futures contract

standardized legal agreement to buy or sell something (usually a commodity or financial instrument) at a predetermined price (“forward price”) at a specified time (“delivery date”) in the future

A futures contract is an agreement between two parties.[1] The buyer pays the seller today for the promise of the commodity at a future date.[2] Futures contracts are traded in futures exchanges.[3] The commodities can be things such as livestock, agriculture produce, metals, energy, and financial products.[4] Trading futures can be profitable.[4] But it is also complex and very risky.[5] Instead of gaining a profit, an investor can lose the money invested.[4] They could be required to pay more than they invested.[5]



  1. "Definition of 'Futures Contract'". The Economic Times. Bennett, Coleman & Co. Ltd. Retrieved December 9, 2016.
  2. "What is a 'Futures Contract'". Investopedia. Retrieved December 9, 2016.
  3. "Futures Trading Basics". TheOptionsGuide.com. Retrieved 26 June 2015.
  4. 4.0 4.1 4.2 "Futures Contract". InvestingAnswers, Inc. Retrieved December 9, 2016.
  5. 5.0 5.1 "Futures Markets Basics". U.S. Commodies Futures Trading Commission. Retrieved 26 June 2015.